Shares slip back after Republican tax rejection

The local share market is giving up nearly all of its early gains, after US Republicans rejected their leaders' own tax compromise proposal.

Republican House speaker John Boehner pulled a bill for tax increases on millionaires due to a lack of support from members of his own party.

The move renewed doubts over whether the US budget standoff will be resolved before the end of the year, when a raft of spending cuts and tax increases will automatically kick-in unless a deal is struck before hand, possibly pushing the US back into recession.

The All Ordinaries index was just 2 points higher at 4,648 around 1:00pm (AEDT), after being almost half a per cent higher most of the morning.

The ASX 200 had a similar sudden drop, to also be only 2 points ahead at 4,637.

Resources stocks have taken the biggest hit and are weighing on the broader market.

Rio Tinto was down 0.8 per cent, while BHP Billiton was 0.5 per cent lower.

Gold miner Newcrest had eased 18 cents to $22.31, after spot gold fell to its lowest level since August in overnight trading.

Of the major banks, ANZ was up 1 per cent, Westpac and the Commonwealth Bank were 0.8 per cent higher, but NAB was steady at $24.88.

Retailers were mixed - Myer was flat, and surfwear firm Billabong was up more than 3 per cent after big falls over the last couple of days.

Free trade is the oldest argument in federal politics and the issue that literally defined the federation era but opposition exists to the TPP, courtesy of the Investor-State Dispute Resolutions clause.